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NATIONAL INTERGROUP REPORTS SIGNIFICANT INCREASE IN SECOND QUARTER SALES AND TURNAROUND IN EARNINGS FROM CONTINUING OPERATIONS

NATIONAL INTERGROUP REPORTS SIGNIFICANT INCREASE IN SECOND QUARTER
 SALES AND TURNAROUND IN EARNINGS FROM CONTINUING OPERATIONS
 DALLAS, Oct. 21 /PRNewswire/ -- National Intergroup, Inc. (NYSE: NII) today reported strong growth in sales and earnings from continuing operations for the second quarter ended Sept. 30, 1992, according to Melvyn J. Estrin and Abbey J. Butler, co-chairmen and co- chief executive officers. Sales increased 45 percent to $1.2 billion, compared with the $826.3 million recorded for the second quarter of the previous year. For the three months ended Sept. 30, 1992, net income available to common shareholders was $2.5 million, or $0.12 per share, including an extraordinary gain of $247,000, or $0.01 per share, from the utilization of net operating loss carryforwards. There was no contribution from discontinued operations during the second quarter of the current fiscal year.
 For the same period last year, net income available to common shareholders was $17.1 million, or $0.78 per share. This included a $25.6 million, or $1.17 per share, gain on disposal of discontinued operations and a $2.1 million, or $0.09 per share, extraordinary item for the utilization of net operating loss carryforwards, partially offset by a charge for the early extinguishment of debt.
 In both periods the company paid $1.4 million in preferred stock dividends.
 National Intergroup earned $3.6 million, or $0.11 per share, from continuing operations before extraordinary item for the quarter ended Sept. 30, 1992. For the prior year's second quarter, the company recorded a loss of $9.2 million, or $0.48 per share, from continuing operations before extraordinary item.
 Operating income for the second quarter this year was $12.2 million, versus an operating loss of $1.3 million for the three months ended Sept. 30, 1991.
 The co-chairmen attributed National Intergroup's sales and earnings growth to continued progress at its two subsidiaries, FoxMeyer corporation and Ben Franklin Retail Stores, Inc., which reported their second quarter results in the past week. "FoxMeyer achieved sales growth of almost 50 percent for the second quarter, surpassing $1 billion in a quarter for the first time in its history," Estrin and Butler said. Just under half of FoxMeyer's sales growth was internally generated, with the remainder contributed by Harris Wholesale, which FoxMeyer acquired May 7, and the company's new warehouse near Minneapolis, which was acquired from Snyder's Drug Stores. "Despite the integration expenses of Harris and Snyder's warehouse operations, we're extremely pleased that FoxMeyer continued to lower operating expenses as a percent of sales," they said.
 FoxMeyer's operating income increased 40.8 percent to $12.0 million for the second quarter ended Sept. 30, 1992, and income before extraordinary items was up 41.3 percent to $6.0 million, compared with the second quarter last year.
 FoxMeyer is continuing to ship on a cash basis to Phar-Mor, Inc., which filed for bankruptcy Aug. 17; at that time it owed FoxMeyer a total of $72.4 million. "FoxMeyer is assessing that situation and at this time has not taken a write-off. Sales volume to Phar-Mor has held up well. We and FoxMeyer's management are evaluating the proposed debtor-in-possession financing agreements and Phar-Mor's business plan for the next 1-2 years, including the pending completion of the Phar-Mor audit," Estrin and Butler said. "FoxMeyer is discussing with Phar-Mor their continuing supply relationship, and we anticipate that, as they work toward a conclusion, FoxMeyer will be better able to evaluate any possible write-off."
 Based in Dallas, FoxMeyer is the nation's third largest pharmaceutical distributor, serving customers in 46 states.
 Ben Franklin Retail Stores reported net income of $1.8 million for the second quarter, a 28.8 percent improvement over the same period the previous year, on sales of $96.9 million. "These results reflect new Ben Franklin Crafts Superstore openings and rising consumer interest in crafts and craft merchandise," they said. Ben Franklin Retail Stores is a franchisor to 704 variety stores and 241 craft stores in 47 states. Five of the Crafts Superstores are company-owned and operated.
 Results for the First Half
 National Intergroup recorded $2.2 billion in sales for the first six months of its fiscal year, 37.5 percent higher than sales for the same period ended Sept. 30, 1991. Net income applicable to common shareholders was $4.0 million, or $0.19 per share, which included an extraordinary gain of $247,000, or $0.01 per share, from the utilization of net operating loss carryforwards. There was no contribution from discontinued operations during the first half ended Sept. 30, 1992.
 For the first half last year, net income available to common shareholders was $18.2 million, or $0.83 per share. This included a $25.6 million, or $1.17 per share, gain on disposal of discontinued operations and a $3.5 million, or $0.16 per share, extraordinary item for the utilization of net operating loss carryforwards, partially offset by a charge for the early extinguishment of debt.
 In both periods the company paid $2.8 million in preferred stock dividends.
 National Intergroup earned $6.5 million, or $0.18 per share, from continuing operations before extraordinary item for the six months ended Sept. 30, 1992. For the prior year's first half, the company lost $8.1 million, or $0.50 per share, from continuing operations before extraordinary item.
 Operating income for the first six months this year was $21.5 million, versus operating income of $6.2 million for the six months ended Sept. 30, 1991.
 National Intergroup owns 67 percent of Ben Franklin Retail Stores and 70.5 percent of FoxMeyer Corporation. On Oct. 16, 1992, National Intergroup and FoxMeyer announced that they had determined to commence a joint tender offer for 3.3 million shares of the common stock of FoxMeyer at $13.50 net in cash per share. If 3.3 million shares are purchased by FoxMeyer and National Intergroup pursuant to the offer, National Intergroup will own approximately 80.5 percent of the outstanding common shares of FoxMeyer. Under these circumstances, National Intergroup would be able to consolidate FoxMeyer for tax reporting purposes, which would increase the parent company's cash flow through utilization of certain tax loss carryforwards.
 NATIONAL INTERGROUP, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (Thousands of dollars, except per share amounts - Unaudited)
 Percent
 Three months ended Sept. 30 1992 1991 Change
 NET SALES $1,201,080 $826,327 45.4
 COSTS and EXPENSES
 Cost of goods sold 1,124,319 768,040
 Selling, general and
 administrative expenses 61,132 47,750
 Depreciation and
 amortization 4,716 3,617
 Unusual items -- 10,291
 Total 1,190,167 829,698
 OTHER INCOME 1,285 2,081
 Operating income (loss) 12,198 (1,290)
 NET PREFERRED DIVIDEND
 INCOME FROM NATIONAL
 STEEL CORPORATION 1,661 1,891
 FINANCING COSTS
 Interest income 877 1,138
 Interest expense 3,684 6,500
 Total 2,807 5,362
 Income (loss) from
 continuing operations
 before income tax
 provision, minority
 interest and
 extraordinary item 11,052 (4,761)
 INCOME TAX PROVISION 4,992 3,525
 Income (loss) from
 continuing operations
 before minority interest
 and extraordinary item 6,060 (8,286)
 MINORITY INTEREST IN
 RESULTS OF OPERATIONS OF
 CONSOLIDATED SUBSIDIARIES 2,422 914
 Income (loss) from
 continuing operations
 before extraordinary item 3,638 (9,200)
 DISCONTINUED OPERATIONS
 Gain on disposal of
 discontinued operations -- 25,569
 Income (loss) before
 extraordinary item 3,638 16,369
 EXTRAORDINARY ITEM 247 2,117
 NET INCOME 3,885 18,486
 Preferred stock dividends 1,375 1,375
 NET INCOME APPLICABLE TO
 COMMON STOCKHOLDERS $ 2,510 $ 17,111
 PER SHARE OF COMMON STOCK
 Income (loss) from
 continuing operations
 before extraordinary item $0.11 ($0.48)
 Discontinued operations 0.00 1.17
 Extraordinary items 0.01 0.09
 NET INCOME PER SHARE $0.12 $0.78
 AVERAGE NUMBER OF SHARES
 OUTSTANDING 19,974 21,930
 NATIONAL INTERGROUP, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (Thousands of dollars, except per share amounts - Unaudited)
 Percent
 Six months ended Sept. 30 1992 1991 Change
 NET SALES $2,216,870 $1,612,389 37.5
 COSTS and EXPENSES
 Cost of goods sold 2,074,132 1,497,926
 S,G&A expenses 115,643 95,301
 Depreciation and amortization 9,031 7,286
 Unusual items -- 10,291
 Total 2,198,806 1,610,804
 OTHER INCOME 3,398 4,653
 Operating income (loss) 21,462 6,238
 NET PREFERRED DIVIDEND
 INCOME FROM NATIONAL STEEL
 CORPORATION 3,332 3,790
 FINANCING COSTS
 Interest income 1,762 1,595
 Interest expense 6,543 12,797
 Total 4,781 11,202
 Income (loss) from
 continuing operations
 before income tax
 provision, minority
 interest and
 extraordinary item 20,013 (1,174)
 INCOME TAX PROVISION 9,130 6,017
 Income (loss) from
 continuing operations
 before minority
 interest and
 extraordinary item 10,883 (7,191)
 MINORITY INTEREST IN RESULTS
 OF OPERATIONS OF CONSOLIDATED
 SUBSIDIARIES 4,427 914
 Income (loss) from
 continuing operations
 before extraordinary item 6,456 (8,105)
 DISCONTINUED OPERATIONS
 Gain on disposal of
 discontinued operations -- 25,569
 Income (loss) before
 extraordinary item 6,456 17,464
 EXTRAORDINARY ITEM 247 3,437
 NET INCOME 6,703 20,901
 Preferred stock dividends 2,750 2,750
 NET INCOME APPLICABLE TO
 COMMON STOCKHOLDERS $3,953 $18,151
 PER SHARE OF COMMON STOCK
 Income (loss) from
 continuing operations
 before extraordinary item $0.18 ($0.50)
 Discontinued operations 0.00 1.17
 Extraordinary items 0.01 0.16
 NET INCOME PER SHARE $0.19 $0.83
 AVERAGE NUMBER OF SHARES
 OUTSTANDING 20,237 21,910
 NATIONAL INTERGROUP, INC. AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (Thousands of Dollars - Unaudited)
 ASSETS Sept. 30, 1992 March 31, 1992
 CURRENT ASSETS (Unaudited)
 Cash and short-term investments $62,270 $65,308
 Receivables - net 354,723 276,760
 Inventories 631,201 380,812
 Other current assets 12,865 12,458
 TOTAL CURRENT ASSETS 1,061,059 735,338
 INVESTMENT IN NATIONAL STEEL
 CORPORATION 114,972 111,787
 PROPERTY, PLANT AND EQUIPMENT 125,164 110,822
 Less: allowances for depreciation
 and amortization 49,382 47,534
 Total 75,782 63,288
 OTHER ASSETS
 Goodwill - net 235,233 158,154
 Intangible assets - net 15,028 15,746
 Miscellaneous assets 116,107 45,264
 Total 366,368 219,164
 TOTAL ASSETS $1,618,181 $1,129,577
 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Accounts payable $664,240 $349,921
 Accrued liabilities 71,474 52,754
 Long-term debt due within one year 10,998 1,014
 TOTAL CURRENT LIABILITIES 746,712 403,689
 LONG-TERM DEBT 185,563 29,638
 RESERVES AND OTHER LIABILITIES 86,642 84,510
 MINORITY INTEREST IN CONSOLIDATED
 SUBSIDIARIES 163,337 167,488
 REDEEMABLE PREFERRED STOCK 55,000 55,000
 STOCKHOLDERS' EQUITY
 Common stock 119,940 119,940
 Capital in excess of par value 201,108 202,132
 Retained earnings 147,387 143,434
 Sub-Total 468,435 465,506
 Less: common stock in Treasury 87,508 76,254
 Sub-Total 380,927 389,252
 TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY $1,618,181 $1,129,577
 -0- 10/21/92
 /CONTACT: J. Warren Henry of National Intergroup, 214-446-4270/
 (NII) CO: National Intergroup, Inc. ST: Texas IN: REA SU: ERN


SM -- NY123 -- 3159 10/21/92 17:33 EDT
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